If you press the Retry button yo u receive the same error, if you press Cancel the installation process continues and completes.

The issue turns out to be that the version of msxml3 installed on the system is a letre version than the one that comes with Exchange Service Pack 2 ( which I think is msxml SP5). Ther version on this system was msxml3 SP7. Why oh why Microsoft.

Now when we looked at the specific registry key she mentions in her article we couldn't locate the key. so we looked through all the entries under HKLM | Software | Classes | Installer | Products till we found one where the product key equalled 'Microsoft XML Parser'. We then exported the key from the registry as a backup and deleted it.

When we reran the Service Pack setup everything went through without an error - PHEW.